Our nation’s electricity infrastructure will be upgraded into an efficient, secure, reliable, adaptable machine! But the slow smart grid evolution will be achieved with smaller steps. What does short term smart grid future look like? Read on for current smart grid trends.
by Jeremy Gross, Green Economy Post
Upgrading our nation’s electricity infrastructure has the potential to reduce costly capital investments (costs that get passed on to us) and increase energy efficiency (more bang for your buck is always appreciated!).
As technology advances and environmental issues rotate into the spotlight of 24 / 7 news coverage and dinner table conversations, smart grid solutions will continue to have a growing impact on our lives. This is especially true as the U.S. Energy Information Administration estimates that the demand for electricity will increase 30 percent from 2008 to 2035 – or about 1 percent a year.
As discussed in my prior article, Smart Grid 101, the smart grid is a growing component of utility and business strategy. One of the main concepts is that before we continue building just to meet future needs, there are ways to use what we already have more efficiently. For example, the Department of Energy (DOE) estimates that if the grid efficiency increased by 5%, we would save enough energy with the same impact of permanently removing the fuel and greenhouse gas emissions from 53 million cars. I did some reading and wanted to recap some information I found, along with some of my own thoughts, regarding some current smart grid trends.
1. Increased Smart Meter Roll Outs
A key component to the smart grid is the smart meter – allowing the two-way communication and measurement of data and power for households and businesses. Utilities will continue to expand their smart meter pilots. I wasn’t able to find updated numbers, but a Parks Associates report33 million smart meters from last summer indicated that smart meters made up 6 percent of all meters in the U.S. This was an increase from 4.7 percent a year earlier. It’s estimated that will be installed through 2011. [See Smart Meter Upgrades and Market Opportunities]
2. Increased Billing Structure Changes
For the majority of customers, electricity is priced at the same rate without regard to grid demand or the time of consumption. With this structure, customers have less incentive to change behavior during peak or off-peak time. If electricity prices were based on time-of-use, and businesses were empowered with detailed information on how much it actually costs to run devices and processes, they would work to minimize the impact to the bottom line.
Also, demand response opportunities will continue to grow. Demand response is an agreement between customers (mostly businesses, but also households) and the utility to automatically reduce electricity demand when the available supply is restricted in exchange for pricing incentives. [See The Smart Grid: Why Getting Dynamic Pricing Right Is More Important Now Than Ever]
3. Increased Customer Education
Without customer adoption, there will not be any progress! Why should a business adopt smart meters, smart grid services, change operations, etc? Utilities will need to educate businesses by providing energy consumption details and offer clear benefits that show a return on any investments. One possible way to provide education is by promoting energy audits. Energy audits can help a business identify how to reduce energy usage without affecting the business – and smart grid components will play a role in this.
4. Government Action and Policy
With the American Recovery and Reinvestment Act of 2009 (ARRA 2009) stimulus package, the smart grid was allocated $4.3 billion. The government will continue awarding the money to smart grid projects. Additionally, as Smart Grid News points out in their Stimulus Toolkit, there are other buckets of ARRA funds that can be used to support smart grid-like initiatives:
- New loan authority for Bonneville Power and Western Area Power Authority for transmission projects ($6.5B)
- Energy Efficiency and Conservation Block Grant ($3.2B)
- Transportation, including electric vehicles ($1.7B)
- Renewable energy loan guarantees ($6B)
- Research in energy efficiency, renewables, batteries and clean fossil energy ($8.4B)
- Broadband Technologies Opportunities Program ($7.2B)
All of these items have government support and will help in securing the nation’s current and future electric infrastructure. [See DOE to Invest $3.4 Billion in Smart Grid]
5. Development of Near-term Electric Transportation
Trends in transportation indicate that plug-in hybrid electric vehicles (PHEV) will continue to play a transforming role in our lives and the smart grid. BMW announced that their electric car, currently called the Mega City Vehicle (MCV), will be offered in 2013. On a shorter time frame, we have the PHEV Chevy Volt (coming November 2010) and the all-electric Nissan Leaf (coming December 2010). And Telsa, the electric vehicle manufacturer founded by PayPal entrepreneur Elon Musk, intends to build a middle-range car by 2012.
Also, CE’s Five Technology Trends To Watch cites a 2006 study by the U.S. Department of Energy’s Pacific Northwest National Laboratory which stated an estimated 73 percent of the United States’ current light vehicle fleet (passenger cars, pickup trucks, SUVs, and vans) could be charged without adding new power plants to the current grid. That could save 6.5 million barrels of oil. [See Is 2010 the Year of the Electric (and Plugin Hybrid) Car? ]
6. Closer to Smart Grid Standards
Solidifying standards is important as utilities, equipment manufacturers, and other players look to integrate all of the different pieces of the smart grid puzzle into a common architecture. The National Institute of Standards and Technology (NIST) received ARRA funding to help develop a standards framework for smart grid devices and systems. The NIST has indicated the implementation of a testing and certification framework for standards in 2010.
7. Company Pipelines with Smart Grid Products
As standards fall in place and technology evolves, we’ll see an expanding list of products that interact with the smart grid. Everything from dryers and refrigerators to lighting, HVAC, and security systems.
8. Energy Guzzling Industries will Lead Adoption
As one example, the data center and telecommunications industries consume a lot of energy. Energy and cost management is very important. I bet that smart grid applications will be adopted faster with open arms as these businesses will be able to better track and manage their energy usage.
9. Big Name Players Branch into The Smart Grid
Cisco. Google. Microsoft. GE. AT&T. Having household names entering the smart grid game shows the business is no longer just a niche market. These companies are gigantic and need big opportunities to sustain their quarterly numbers over the long term. It also adds a certain level of legitimacy when making the smart grid pitch to potential customers.
Additional Resources
2008 DOE Office of Electricity Delivery and Energy Reliability Publication. A great resource that explores “the nature, challenges, opportunities and necessity of Smart Grid implementation.”
Impacts Assessment Of Plug-In Hybrid Vehicles On Electric Utilities (PDF)
Consumer Electronics Association Five Technology Trends to Watch (PDF)
U.S. Energy Information Administration Annual Energy Outlook for 2010
Can you add to my trends list above? What do you see coming down the road?
Photo Courtesy of Jesper Baerentzen
